A number of tax changes aimed at reducing complexity, cutting red tape and providing tax relief for small businesses have been introduced this year. Following is an outline of the changes relevant for small businesses in this financial year.
From the 2012-13 income year, small business can:
- immediately write-off of all assets valued at under $6,500 (up from $1,000 previously); and
- write-off all other assets (except for buildings) in a single depreciation pool at a rate of 30% (15% in the first year).
This is simpler than the current system, where small businesses write-off assets valued at less than $1000 and allocate higher valued assets to two different depreciation pools with depreciation rates of either 30 per cent or 5 per cent.
Also from the 2012-13 income year, small business will be able to:
- immediately write-off up to $5,000 for motor vehicles, with the remainder to be written off at a rate of 15% in the first year and 30% for following years.
- Small business companies will also benefit from a reduction in the company tax rate from 30 per cent to 29 per cent.
Please contact us on (02) 9908 9888 if you require any guidance about these new initiatives.